A joint PfEU article

10 April, 2020

The global spread of Covid-19 not only threatens our health (systems), but it also constitutes a major challenge to the stability of the European Union and reveals unsolved problems. The current crisis demonstrates that national decisions have a global impact. Rapid national lockdowns, a high mortality rate, wildly fluctuating stock markets and constitutional reforms are only some of the negative consequences that have appeared during the recent weeks.

The European Union had almost ignored the threat in the beginning of the crisis when the virus was spreading rapidly in Italy, and shortly thereafter the EU quickly became the official epicentre of the pandemic. As of 9 April 2020, European countries have been reporting 709 688 cases, constituting almost 50% of the worldwide infections. Of 87 816 deaths worldwide, 60 615 deaths can be allocated to Europe. Further, the national cases within the EU reveal enormous regional differences, in particular in regard to the mortality-rate.

In order to fight the virus successfully and to mitigate the major socio-economic impact, member states of the EU need to find a common approach. In this joint article, we analyse the impact of Covid-19 on EU Foreign Affairs & Security, on the internal market, on migration policy as well as on environmental policy. Further, we examine the responses of the European Commission and of EU member states and give policy recommendations.

EU and the Geopolitics of COVID-19

Klement Camaj | Associate Director

As the world combats a faceless enemy in COVID-19, the European Union is emphasizing the need for unity and European strength in the face of this pandemic. Early in March, as the virus quickly made its way through Europe, France called for an extraordinary European Council meeting. The joint response from the EU Heads of State and Governments call for coordination among member states to protect Europeans, and to reduce the socioeconomic impact of the pandemic. Their efforts focus on pooling medical equipment (PPE, ventilators, laboratory kits, etc.), a €140 million budget on vaccine research, implementing efforts for the repatriation of EU citizens stranded abroad, facilitating movement within Europe, along with the financial support of €37 billion relocated to cohesion policy from the EU’s budget (“Corona Response Investment Initiative”). Companies have been told to relax rules on state aid and member states are allowed to waive budgetary regulations in light of the pandemic.

Their joint response and need for European solidarity in the face of the virus is at a crossroads with the reality of many member states. Europe’s famed Schengen Zone is almost non-existent at the moment as many member states have reintroduced border controls in an effort to combat the spread of the virus and protect their citizens. One of the most active voices against reintroducing borders has been the President of France, Emanuel Macron, stating “The risk we are facing is the death of Schengen”. Along with Luxembourg, both heads of state are emphasizing the need for European solidarity. While borders should be closed to foreign travellers as means of containment, they should be open to Europeans as Schengen provides the exact criteria and framework for cooperation against this challenge.

COVID-19 also proves itself to be a chance for the EU to strengthen their foreign policy tactics. Instead of closing borders and turning inward, Josep Borrell, the EU’s High Representative for Foreign Affairs emphasises that COVID-19 can only be defeated with “cross-border coordination – in Europe and beyond”. This call reaffirms the Unions position on global support, cooperation and solidarity by promoting joint efforts with China and the United States, but also emphasizing the need to assist in conflict zones with existing security issues.

Internally, the President of the European Commission has emphasized the need for continuous European cooperation and has created the political mechanisms for Member States to support each other through economic means, advisory panels for specialist and epidemiologists, various initiatives for bank loans, and emergency response programmes. Additionally, EU Member States have shown their continued solidarity to worst affected areas by sending masks to Italy, flying patients from France and Italy to Germany, and providing Italy with protective suits and equipment.

EU enlargement has continued despite the ongoing world pandemic, as North Macedonia and Albania were processed on to the next step on their path to the EU and opened EU accession negotiations. The EU’s continued support and commitment to the stability and prosperity of the Western Balkans is visible in this move to open accession negotiations even during a time of a global health pandemic. Additionally they have allocated nearly €40 million in aid for the Western Balkans in the fight against the virus, in a means to reaffirm the European perspective in the area as countries such as Serbia praise assistance from China.

The Impact of COVID-19 on the Interal Market

Elise Racine | Research Associate

While the full scale of the pandemic’s economic impact remains to be seen, it is clear that COVID-19 has caused a major exogenous supply-demand shock with already significant consequences for the EU. By forcing businesses to close and disrupting global supply chains, the virus has reduced productive capacity worldwide. Economies throughout Europe have come to a standstill as governments enact containment measures necessary to limit the virus’ spread, and prevent it from overwhelming healthcare systems. As more people become ill, lose jobs, self-isolate, and reduce spending, we will only continue to see substantial drops in demand.

The consensus, however, is that COVID-19’s economic impact is multifaceted with cascading effects, including liquidity and solvency issues. These second-order effects could transform this situation from an acute economic crisis to a prolonged economic downturn. Recent projections predict the Eurozone entering a deep recession by the end of 2020. Faced with this sudden collapse of economic activity, many EU countries may experience large increases in their nominal sovereign debt burdens. Furthermore, the wave of border closures has threatened the free movement of people, goods, and services—central tenets to the European single market.

To mitigate these negative socio-economic consequences and aid recovery, a quick, sizable, and coordinated response involving both fiscal and monetary interventions is essential. Thus far, the EU has taken a number of actions, including recently publishing guidelines on health-related border management measures to ensure the availability of goods and essential services. Such efforts aimed at keeping national restrictions to a minimum are key to averting a single market fragmented along national lines.

Regarding the use of EU funds, the European Commission has not only allocated €37 billion to a Coronavirus Response Investment Initiative, but proposed extending the scope of the EU Solidarity Fund to encompass public health crises so as to make an additional €800 million available to the hardest hit Member States. The Commission also activated the general escape clause of the Stability and Growth Pact—suspending the zone’s normal debt and deficit limits—and adopted a Temporary Framework for State Aid Measures. The latter will be in place until December 2020 and can be extended if needed. These efforts will enable national governments to deliver the full-range of policy actions required to minimize the virus’ economic fallout.

These measures will be supplemented by the European Central Bank’s €750 billion Pandemic Emergency Purchase Program. Overall, the EU and its Member States are mobilizing 2% and 13% of EU GDP in fiscal measures and liquidity support respectively. The EU, however, can broaden these actions by using all available European Stability Mechanism instruments—such as a COVID line of credit—to assure Member States that significant spending in response to the pandemic will not jeopardize their bond market access.

Moreover, preventing a full-blown depression within the EU requires a substantial recovery plan. A comprehensive plan would use this crisis as an impetus to accelerate the green transition by not only re-focusing limited resources, but conditioning relief on the adoption of green targets. While Member States may attempt recovery on their own, this pandemic illustrates the vital interconnectedness of the EU. Any measures moving forward will thus need to demonstrate a continued commitment to the integrity of the internal market and draw from the strength of common European institutions and policies if they hope to succeed.

COVID-19’s Impacts on Migration

Klement Camaj | Associate Director

The COVID-19 pandemic has changed the landscape of the global community as citizens are urged to remain inside, borders are closed off, and health systems around the world are burdened with a revolving door of cases and patients. While this situation can be easily mitigated for those who have the social protection of their governments, citizenship and healthcare, and most importantly, a home to live in, the same cannot be said for the migrant population scattered throughout Europe.

Portugal has taken the initiative to provide temporary grants for all migrants and asylum seekers, allowing them full citizenship rights. As Claudia Veloso, a spokeswoman for Portugal’s Ministry of Internal Affairs, states “People should not be deprived of their rights to health and public service just because their application has not yet been processed.” While this is only a temporary measure, ending on June 30^th, this move will allow these migrants and asylum seekers full access to Portugal’s healthcare in hopes of reducing the risk for public health.

Thus far, no other country in Europe has provided such temporary status for migrants. Instead, they have implemented stricter rules and regulations. Borders across Europe have been closed to foreigners or new arrivals and many countries, such as Slovakia and Hungary, will only allow entrance to those renewing temporary residence permits, with Hungary reinforcing the need for visas to be renewed, adding that there is no grace period for renewals. Germany, on the other hand, remains open to facilitating immigration from non-EU countries. Continuing with a law that Germany passed on March 1, 2020, companies still hope to hire high-skilled workers from abroad, even though they have seen a noticeable decline in placement from abroad since the beginning of the pandemic. With the closing of borders and reception facilities for migrants, many migrants across Europe are left in “no-man’s land” without proper access to healthcare services or stuck in unhygienic and overpopulated detention centres.

A joint press release put out by OHCHR, IOM, UNHCR, and WHO, urges the need to protect the rights and health of all refugees during this crisis. Currently, the largest worry falls on those who are being held in formal and informal places of detention; specifically, cramped and unsanitary refugee camps. As the whole world moves towards practices of social distancing, isolation, and vigilant hygiene, those in refugee camps and detention centres are extremely vulnerable to COVID-19.

Just this week, 23 migrants living in the Ritsona Camp near Athens, Greece, tested positive for the virus; out of the 2,700 refugees living there, over 250 are unaccompanied minors. The camp has thus been immediately quarantined. The fear of the virus spreading through these camps has been building since the start of the pandemic. The IOM is calling for these camps to be decongested, even suggesting temporarily moving arrangements to the mainland of Greece. Despite their financial support from the EU, IOM Chief, Gianluca Rocco, is calling for more support from European Union Member States. Additionally, the IOM is also working on implementing voluntary return mechanisms for migrants to return to their home state, but they are severely restricted due to virus-related measures taken by states in regard to air and land travel.

Coronavirus Derails Decisions on Green New Deal Initiatives

Doris Wu | Research Associate

Today, we face a pressing existential global threat: climate change. Currently, millions suffer from pollution-related illnesses and deaths, while others become climate migrants—losing livelihoods and homes due to extreme weather events. Furthermore, anthropogenic disturbances and environmental pollution cause irreversible losses in habitat and biodiversity. These effects destabilize entire economies—placing unnecessary burdens on social, economic and public health systems. Poorer countries unequivocally bear the brunt of climate change—lacking resources and infrastructure—despite wealthier countries emitting more greenhouse gases.

After taking office last December, European Commission President Ursula von der Leyen presented the Green New Deal to combat climate change. In the initial 100 days, she proposed the first European Climate Law to reach climate-neutrality through several initiatives by 2050, with aims to already cut emissions by 50% before 2030. Unfortunately, the coronavirus pandemic has now derailed the original agenda timeline—shifting priorities away from the climate crisis.

However, infectious disease outbreaks are a direct symptom of climate change. When SARS-COV-2 shifted from animals to humans in Wuhan last December, infectious disease researchers were not surprised. Biodiversity loss, habitat destruction and climate change create conditions that alter disease systems by unbalancing ecosystems; increasing human-wildlife interfaces; and driving species, vectors and pathogens into new habitats. Over 60% of emerging infectious diseases are zoonotic, with increasing number of outbreaks (e.g. SARS, bird flu, Ebola) recently observed. As biodiversity loss result in fewer primary hosts, viruses and vectors are forced to invade new hosts—including humans.

With the rapid spread of the virus propelled by vast transportation networks, countries relying on migrant seasonal workers face economic uncertainties as borders close—highlighting global connectivity and economic dependency between countries. Therefore, continuing to work on specific strategies, such as Biodiversity and Farm to Fork, will assess governmental weaknesses and help create supply chains that are less sensitive to global disruptions, lower environmental impacts, and support local industries.

With planes grounded and lockdown measures placed, harder hit regions experience significant drops in CO2 emissions—showing direct ties between greenhouse gas emissions, economic growth and transportation. Researchers even estimate that the number of lives saved from reduced air pollution will greatly outnumber COVID-19-related deaths. However, any lingering positive effects depend on current actions. While carbon emissions decreased 1.4% during the 2008-09 economic crisis, effects were negated in 2010 when emissions grew 5.9% as the economy recovered. Therefore, returning to business as usual is unacceptable.

At a time when nature is finally given an opportunity to heal through our forced quarantine, green fiscal policy should be the priority. Although we face a more acute tangible threat, far graver consequences will emerge if this time is not used to thoughtfully re-stimulate the economy (and re-evaluate our own behaviours) within the framework of climate change. We simply cannot allow economic recovery at the continued environmental expense; bailing out high-emission industries without shifting focus towards green innovation and a circular economy will only erase accrued environmental gains. While dealing with coronavirus, we must also consider the post-pandemic world. This crisis shows quick mobilization within and across borders is possible—so why not apply the same urgency towards tackling climate change?